Cohesive Institutions and Political Violence

Jun 2018 | 210

Authors: Thiemo Fetzer, Stephan Kyburz

Can institutionalized transfers of resource rents be a source of civil conflict?
Are cohesive institutions better in managing distributive conflicts? We study
these questions exploiting exogenous variation in revenue disbursements to
local governments together with new data on local democratic institutions in
Nigeria. We make three contributions. First, we document the existence of a
strong link between rents and conflict far away from the location of the actual
resource. Second, we show that distributive conflict is highly organized involving
political militias and concentrated in the extent to which local governments
are non-cohesive. Third, we show that democratic practice in form having
elected local governments significantly weakens the causal link between rents
and political violence. We document that elections (vis-a-vis appointments), by
producing more cohesive institutions, vastly limit the extent to which distributional
conflict between groups breaks out following shocks to the available
rents. Throughout, we confirm these findings using individual level survey

JEL Codes: Q33, O13, N52, R11, L71

Keywords: conflict, ethnicity, natural resources, political economy, commodity prices

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